The subsidy came into force with effect from January 1, 2012, but its benefits have not yet accrued to the company for a want of a decision on the mechanism for its application, Hamoud bin Mustahail Ahmed al Mashani, Chairman of the Board of Directors, said.
“The losses will be compensated once we start receiving the feed subsidy,” he stated in the Chairman’s Report on the company’s financial performance during 2011.
“There has been a significant decline in our gross profit margin in the current year; as compared to the previous year even though the revenue has increased by 12% mainly due to the abnormal increase in the raw material prices and the handing over of the leased land to the Ministry of Housing in June 2010.
“This resulted in the loss of production of fodder for our animals this year as well, and we continue to import feed where the cost is higher than domestic production. Soaring world market commodity prices has put pressure on our product margins,” the Chairman stated.